Pennridge District Director Proposes Occupation Tax Cut

A Pennridge School Board member proposed last night reducing the district occupation tax from 575 to 550 mills as the first step in a gradual abolition of the unpopular levy.

Gregory Golazeski said the tax, under which district residents pay a flat amount according to their occupation, is unfair and is likely to be abolished soon by the state Legislature. He suggested replacing the lost revenue with 1 mill of real estate tax.

"I would like to see the board weaned from the occupation tax," Golazeski said.

Two other board members, David Hersh and William Wilson, supported reducing the tax, but no decision was made. "I think reducing it a small amount would not be a bad idea," Wilson said.

The discussion occurred during a budget committee hearing on the district's proposed 1988-89 budget of $43.2 million that could raise real estate taxes by 13.5 mills. The board is scheduled to adopt a tentative budget May 2. Adoption of a final budget is set for June 6.

Golazeski said a study last year by the Legislature found that Pennridge is one of only 17 school districts in the state that would be forced raise real estate taxes if the state abolished the occupation tax. There are 502 school districts in the state.

In addition, Golazeski said, the tax is unfair because the flat assessment, for instance, forces a secretary earning minimum wage to pay as much as a Center City Philadelphia secretary earning $25,000-$30,000 yearly, and the tax is difficult to collect, with only 82 cents of each $1 levied being collected.

If the district fails to gradually reduce its dependence on the occupation tax, Golazeski said, it could be forced to raise the real estate tax by 7 or 8 mills if the Legislature passes a tax reform package repealing the occupation levy.

Hersh supported Golazeski's proposal and said the Legislature should also remove the 1 percent limit on the earned income tax. Philadelphia, he noted, is permitted to levy a 4.93 percent earned income tax.

Wilson said the occupation tax has caused "a lot of concern and anguish over the years." He said the board raised the tax twice during his tenure in the belief that it was distributing the tax burden, instead of placing it all on property owners.

District Superintendent John E. Slattery, however, said the occupation tax ensures that only income earners pay, adding that increasing the real estate tax could hurt senior citizens who have no income. The occupation tax was last raised three years ago from 525 to 575 mills, he said.

But Golazeski said there is a small percentage of senior citizens who have large incomes but pay no taxes. "Now, I'm in trouble with senior citizens," he said.

The occupation tax is expected to raise $2.3 million for the district next year, while the earned income tax will raise $1.8 million, Slattery said.